Experts from the vendor, customer and consultants sides were interviewed. The main criteria for selecting a consultancy-side expert is to have a special interest and experience in cloud computing projects. The criteria for the vendor-side experts is to have direct interaction with total cost estimations for cloud customers.
This can be facilitated by the usage of cloud cost management software provided by your cloud service provider (CSP) or an IT technology partner. The public cloud’s on-demand pricing model is vital in enabling application scalability — the key benefit of cloud computing. Resources need to be readily available for a cloud application to scale when required without the customer having to give advance notification. Cloud providers can offer such flexibility by allowing customers to pay their bills in arrears based on the number of resources consumed during a specified period. Although monitoring is something that businesses should be undertaking using cloud or not, cloud is calling for cloud-specific monitoring tools. ‘Cloud end users act with cloud services like a teenager with a credit card’ said a consultancy side expert.
How to keep cloud costs under control
Although research has been applying TCO on cloud computing for a decade or more, cloud customers are still struggling in getting a full picture of the cloud journey ([9, 3, 34, 61];). Studying the cloud cost management cost of cloud computing is a primary task that should not be treated trivially [5]. This paper extends the research of cloud computing economics by exclusively studying its transactions costs.
However, managing cloud spend can be a daunting task due to the above-discussed cloud cost optimization challenges. A misaligned cloud cost optimization approach between your teams can make all your efforts go in vain. When each team of your organization follows its own approach to managing cloud resources and costs, the result is a less focused cloud cost optimization effort.
Company
However, the cost of the bought service or good is not only the price. Transaction costs refer to the costs linked with managing, monitoring and controlling a transaction [38, 43]. Williamson [54, 55] developed the transaction cost theory to study information asymmetry between vendors and customers. According to him; customers try to monitor and control a transaction through choosing the best way for its governance.
No matter where you are in your cloud journey, now is the time to optimize your cloud investment with solutions that address your most critical cloud challenges. A U.S. nonprofit has played a crucial role in funding innovative research, lifesaving tools and information to help prevent and treat certain diseases. The organization projected a significant increase in demand and incurred high cloud service provider (CSP) costs. Here are three such businesses across multiple industries that have implemented these cloud cost management elements. Pump is an example of creativity and adaptability, not just a money-saving option.
Understanding the components of cloud costs
Customers reported that they had to change some processes to move to the cloud and they still wish to change some more, but it is not a one-day task. Consultants commented that this step of business process reengineering is largely, naïvely-underestimated despite being complicated and vital for a cloud project’s success. A total number of thirteen (13) agreed to participate in the study; five (5) consultancy-side, four (4) customer-side and four (4) vendor-side experts.
- It is absolutely not the best choice for mission-critical tasks and tasks that cannot be terminated quickly.
- Khvostov said it’s all about demonstrating a measurable return on investment (ROI) and continuing discussions between stakeholders.
- As well, Yousif [59] advised that CIOs need to be agile and flexible.
- Furthermore, Gartner anticipate that by 2021 CIOs will be equally sharing the responsibility for change management with chief HR officers.
- That happened to Adobe which racked up an unplanned cloud bill of over 500k because of a computing workload left running on Azure.
End-to-end encrypted (E2EE) messaging app Signal has put out an interesting overview of the costs required to develop and maintain its pro-privacy systems which shield user data from tracking by default. Anyway, even a multi-cloud strategy implies choosing several vendors to opt for. The data that support the expert interviews are available on request from the author. Data are not publicly available because they contain confidential data of the interviewees’ workplace.
People might run servers for tasks and forget about them once the job is done. But you’ll keep paying for them, accumulating massive financial waste. But when doing that, companies essentially assume many of their business variables won’t change during the reservation period. Here are several common cost models used in the cloud, which you can combine depending on your needs. Many IaaS vendors, including the examples listed above, also offer PaaS capabilities. If you need even more storage, Sync also offers an individual 6TB plan for $240/year (this works out to $0.0033 per GB).
Paying for any iCloud plan upgrade bumps you up to iCloud+, which includes goodies like Hide My Email and a custom email domain. And don’t forget about Apple One, which bundles iCloud storage with other Apple subscriptions like Apple Arcade and Apple Music at a lower overall price. From AWS’s perspective, this makes sense, as it always has spare capacity available. Finally, the No Upfront option requires that you pay the amount of your commitment monthly. With the All Upfront option, you’ll pay the entire amount upfront in one payment.